Editors Note: This article was originally published in the Oct. 25, 2023 issue of the Chronicle Progress. Some information may be outdated.
State senator says county could become richest in state if coal units sell, are taxed
Utah lawmakers received the first annual report from a committee created in 2022 by state statute to serve as a sounding board for all things Intermountain Power Agency.
The Project Entity Oversight Committee (PEOC) presented its findings and sought more direction from lawmakers during a presentation Oct. 11 before the legislature’s Public Utilities, Energy, and Technology Interim Committee.
PEOC members include representatives from the Millard County Commission, Millard School District, Millard County Economic Development, Utah League of Cities and Towns, School and Institutional Trust Lands (SITLA), IPA’s board of directors, the governor’s office and one member each from the state Senate and House.
Warren Peterson, a former county official and the representative for SITLA, chairs the committee and admitted it was a difficult first year.
“The experience is a little daunting because it’s like everything else with IPA, it’s such a one-of-a-kind creature…It’s a little hard to know just what the rules are,” Peterson told lawmakers.
One of the committee’s chief responsibilities was to engage the public in how important IPP Renewed was to local citizens and whether there was a pathway to keeping the current power plant’s coal units operating past the deadline to decommission them.
Roger Killpack, the PEOC’s vice chair and economic development representative, told lawmakers the renewal project—IPA is transitioning IPP from a coal-fired generator to a smaller natural gas and hydrogen plant—would provide an immense economic impact to the area.
“We would hope you would consider that going forward that not only the project itself will be a very viable economic benefit to that area, but potentially spin off into future economic things that would be of great value,” he told lawmakers.
Any effort to derail the project at the legislative level, Killpack said, would be “catastrophic.”
The Delta pharmacist said he understood there have been some disputes with IPA regarding taxation, but that hopefully it will be resolved by state leaders.
“We recognize there’s a change going on. We understand there are problems with the government entity and the issues that have revolved around that for decades…We would rely on you to settle that,” Killpack said.
Legislative leaders received an audit report Oct. 10 that recommended numerous changes to IPA’s governance structure, among other suggestions, and highlighted the waning economic benefits from IPP—from the loss of jobs at the plant over time, to declining tax revenues and the failure to uphold a promise to purchase coal only mined in Utah.
The audit also alerted legislators to a lack of transparency and information shared in closed-door meetings that was not shared with auditors, which legislators said was a first for them.
IPA’s status as a political subdivision of the state was also questioned.
The PEOC was created by the legislature after lawmakers promised swift action a few years ago to end some of the statutory benefits IPA seemed to alone enjoy, including not having to adhere to public information laws and taking a tax break for its California power customers despite the discount originally applying only to power sold to its Utah customers. IPP power is 98 percent purchased by Californians, with only about 2 percent being utilized by Utah communities.
PEOC members were tasked with serving as a buffer between legislators and IPA, posing questions and delivering answers to lawmakers.
One obvious interest the lawmakers have had lately is the best way forward with regard to IPP’s coal units.
Killpack said about gaging public interest for keeping them open, that most citizens supported the idea—despite the potential billion dollars it might take to bring the units into federal environmental compliance.
“I’m no expert in this area, by any means. I’m a pharmacist by trade, so I have no expertise in dealing with that. I know there are significant barriers for the coal plant going forward on a federal level. And I suppose if those things can be resolved, I know the local community would do cartwheels. If they could run side by side, that would be a wonderful thing for Millard County,” he told legislators.
Peterson questioned whether the PEOC was the right group to study that issue.
Sen. David Hinkins, the public utilities interim committee chair and a Republican whose district includes mining interests in Carbon and Emery counties, said at one point that if the coal units stayed open they possibly would not be centrally assessed any more and Millard County would receive the full benefit from taxes from the plant.
Hinkins said if some entity came along and bought the coal units and added the necessary upgrades to satisfy federal environmental regulations, then Millard County could become the richest county in the state.
“I hope you guys take that direction and do all you can to help us,” the senator said.
Rep. Carl Albrecht said he thought tackling the Environmental Protection Agency issues related to keeping the coal units open would be the purview of the state’s Department of Environmental Quality and the Office of Energy Development.
The energy development office is currently awaiting a final report on opportunities to continue operations at the coal units. It should be released next month.
In a legislative handout, PEOC shared five questions and IPA’s responses to them, including about offers to purchase the coal units.
IPA revealed in one of the answers that it was recently approached by a company named Omnis Energy and planned to continue discussions about possibly selling the coal units to it. No other details were provided.
But a California-based company called Omnis Fuel Technologies announced in August it had finalized the purchase of a 1,278 megawatt West Virginia coal plant that had been slated for demolition. Omnis said it was planning to convert the coal facility to burn hydrogen, a byproduct produced by a graphite production facility the company is developing nearby.
An early draft of the report the Office of Energy Development contracted about keeping the coal units open— the draft was released during a previous interim committee meeting—mentioned graphite and hydrogen production in an outline of three possible options for IPP’s coal units. No company was named in the report, however.
The PEOC is scheduled to meet again either the last week in November or first week in December.
